In February 2012, then-Toronto deputy mayor and now Tory MPP Doug Holyday and the city’s labour relations officials reached a settlement with CUPE 416 that kept their wage hike to the rate of inflation — 4.5% over four years.

The city’s CUPE 79 workers signed a similar deal a few months later.

Not so for Toronto’s police and firefighters.

For years, arbitrators in Toronto and around the province have awarded police officers and firefighters lucrative contracts well beyond the rate of inflation. Because the province’s emergency services are prohibited from going on strike, a failure to reach a deal at the bargaining table requires the contract to be settled by an arbitrator. And, more often than not, the arbitrated deals have been rich.

“Settlements that have been ordered by the arbitrator (for police and fire) are in the 3% range when the other settlements freely negotiated for other municipal workers haven’t been much more than the inflation rate,” says Kitchener Mayor Carl Zehr.

In early 2011, Toronto’s police services board inked a deal with the city’s 5,300 cops that would give them a 11.5% wage hike over four years — before it went to arbitration, where the board feared it would be enriched even more, based on precedent.

The province had already given the OPP a 5.7% wage hike in the first year combined with that outrageous 8.5% top-up in this, the final year of the contract.

Toronto’s firefighters, who were awarded parity with the police by an arbitrator in 2001, got their own sweet deal last June when an arbitrator awarded them a pay hike of nearly 14.3% over five years.

While Toronto’s emergency services have consistently set the gold standard, it has been a race to the top with police forces and fire services around the province — as settlements and perks offered in the GTA leapfrog from arbitration to arbitration in cities around Ontario.

For years, the problems with interest arbitration have not been firmly addressed by municipal councils and certainly not by the provincial government — probably because police and fire services have always been considered untouchable.

But with all cities in Ontario struggling to deliver a variety of services without handing property taxpayers whopping increases, the whole issue is finally coming out of the closet.

Toronto councillor and former budget chief Mike Del Grande says arbitrators rarely, if ever, take into consideration a municipality’s ability to pay because they aren’t required to in the current legislation.

As the Association of Municipalities of Ontario (AMO) points out in a recent document proposing improvements to the legislation, generous awards have continued unchecked because arbitrators have repeatedly placed a greater priority on replicating agreements from other cities.

“We’re just trying to create a better lens for the arbitrator to really give consideration of a local community in a way that has not been demonstrated yet,” says Pat Vanini, AMO’s executive director.

Zehr uses the issue of retention pay — a special top-up for firefighters and police who achieve nine, 17 and 23 years of service — as an example of the me-too environment in which they are trying to operate.

Introduced by police services board chairman Norm Gardner in 2000 as what was supposed to be a one-off to stem the tide of officers leaving for forces in the 905 region, it quickly became part of an officer’s base pay in subsequent deals.

By 2002, the OPP was granted retention pay and, in 2004, then-mayor David Miller and his friends on Toronto council extended it to the city’s firefighters, calling it recognition pay.

In 2005, when Zehr and some of his colleagues in other cities tried to say “no” to a request by their fire service to get it, too, the issue went to arbitration where it was awarded.

Now, says AMO executive director Pat Vanini, by and large, all police and fire forces in Ontario’s municipalities have it.

Asked if they have a retention problem in Kitchener, Zehr says “absolutely not.”

“There is absolutely no need for retention pay, it’s a joke ... it was a giveaway (in Toronto) and then the firemen had to think of something up to equate with retention pay,” he said.

With police and fire contracts in Toronto set to expire at year’s end, councillors will be back to square one.

Councillor Michael Thompson, vice-chairman of the police services board, suspects it will be tough round of negotiations, knowing full well other deals will be a “barometer” on which the demands by the Toronto Police Association will be based.

“It’s not a matter of not wanting to pay for service ... I think our officers are extremely compensated,” he says. “Police officers in New York City don’t make that kind of money.”

Toronto Police Association President Mike McCormack says when it comes to bargaining, union negotiators stand by their belief that Toronto involves the “most contentious and difficult” policing in Ontario.

“By virtue of the job, we should be (the highest paid) in the province,” he says.

But McCormack insists his negotiating team won’t be coming into the next round of labour talks in a bubble — that is, not understanding the “realities” of the economic situation facing all Ontario municipalities.

He adds that the Police Act includes a provision to “always look at (the city’s) ability to pay.”

That may be so, but as Zehr puts it, a municipality will always have the “ability to pay” if they tax property owners at a higher rate. “It is about the taxpayers’ ability to pay,” he says.

Vanini would prefer that a municipality’s “capacity to pay” be used instead.

There’s no doubt these settlements have started to take their toll on communities around Ontario, most particularly the smaller ones with a poor tax assessment base.

Vanini says instead of choosing to raise taxes, some cities are putting capital projects aside or cutting them entirely.

In other jurisdictions, the high wage settlements have forced cuts to emergency services.

She points to the case of Fort Frances where an arbitrator awarded the town’s firefighters a 16% increase over four years, more benefits and recognition pay.

To make up the difference, Fort Frances ended up cutting two of its firefighters.

Zehr says Kitchener, too, reduced its complement of firefighters by not filling vacancies created by retirements — to make up $500,000 to pay for wage settlements.

“There are three basic things that happen when you run up against these budgets,” says Zehr. “You increase taxes, reduce level of service or pay for all of those things but other operating divisions of the city have to do with less.”

Wage hikes for cops and firefighters too high

In February 2012, then-Toronto deputy mayor and now Tory MPP Doug Holyday and the city’s labour relations officials reached a settlement with CUPE 416 that kept their wage hike to the rate of inflation — 4.5% over four years.

While their repair backlog continued to grow, along with outstanding rent arrears, TCHC brass spent 18 months and $240,000 on consultant studies to determine whether their pay and perqs were high enough, the Toronto Sun has learned.